Organisational Structures

Models, Fashions and Trends

Organisations come in a huge variety of shapes and sizes and there is of course no “right” way to structure an organisation - the most effective design will depend on many factors including the size and nature of the organisation, the environment in which it operates (geographical, economic, political, social) and of course the people who make up the organisation.

That said, we can detect trends and even fashions in the way organisations are structured: communications technology has made it easier to move away from organisational structures based on geographical closeness, likewise the increasing ease of managing dispersed organisations has enabled individual functions or departments to be moved or outsourced to wherever the work can be done most effectively (which often means at lowest cost).

Traditional “command and control” organisations probably owe their design to copying military organisational structures but now we can draw on models of organisation from around the world and from a range of contexts - from massive global organisations to small communes. Social and cultural expectations mean that some ways of organising will not work in some parts of the world, or with certain types of people.

Practical Concerns

Against the background of these “tectonic” shifts in organisational design we find a wealth of practical concerns that need to be resolved, for example:

• To centralise or disperse?
• How to divide up the organisation into management groups: by function, by product, by service, by skill group, by technology, by location, etc ?
• How can we organise when what we do is fluid project-based work?
• Should we create centres of expertise?
• Who should have P&L responsibility?
• Could a matrix organisation work for us?
• Should we remove organisational layers?
• Do we need internal service agreements?
• Should we outsource some activities?
• Does our organisational structure act as an attractor for the type of people we want to recruit?

Any organisational design is a compromise: what you gain on the organisational swings you may lose on the roundabouts. Many an organisation has restructured to solve one problem only to find that a new problem pops up caused by the restructuring.

Restructuring is very disruptive: a good shake up may be just what your organisation needs, on the other hand it could be the last straw. Are you restructuring because you can (“I’ll show them who’s boss”) or because you must? A talk with an impartial consultant can help to clarify the answers to these questions.

Obsidian Consultancy

An Obsidian organisational consultancy assignment would normally consist of three parts:

1. gather information about the organisation
2. generate alternative structural solutions (one of which is always “leave things as they are”)
3. work with the client to identify the best alternative.

Obsidian’s aim is not to provide “the answer” in part 3, rather to help the client to come to a reasoned decision about what to do.

Obsidian Consultants have experience of a range of organisational solutions - both from organisations in which we have held senior positions and those for whom we have acted as consultants.

Tools and techniques

1. Information gathering: this could be through surveys, 1-1 interviews and/or focus groups as well as a certain amount of desk research using information provided by the organisation. An important part of this stage is to understand the purpose of the organisation, how well it the current organisation works and why it might need to change in future.
2. Generate solutions: the analysis of the data from (1) will involve some kind of organisational mapping. Depending on the nature of the organisation we might look for example at the process flows (how work gets done), the network of communications between segments of the organisation or the knowledge/skill needs of various operations.
3. Identifying the best solution: this will always be a dialogue with the client based on debating the pros/cons of a number of alternative options. This is likely to involve workshops with the key decision makers and some kind of stakeholder consultation process.